Tipping and Being Frugal: Can They Coexist?


47 Comments
Gettin' Tipsy

Johnny and I got married in the summer of 2007. After the wedding and honeymoon, we spent the rest of the summer working our tails off together at a Mexican restaurant as servers. I had been a server for a couple years before meeting Johnny, but that summer was the first time Johnny tried his hand at serving. And boy did he thrive in that environment! We worked the exact same shifts, and yet somehow Johnny made more money in tips than me every single night. What can I say? Charm trumped experience. He was very good at his craft. That entire summer we’d bring our spoils home in the form of disgustingly full bellies from half-off food and wads of crumpled bills — which brings me to my topic of the day: tipping.

Mark Cuban recently did an “Ask Me Anything” interview on reddit, and one participant wrote this:

You came into my work and tipped $100 on a $50 tab. You made the waitress’s night. You, Sir, are a gentleman.

To which Mark Cuban responded:

I worked as a bartender and waiter. I always try to tip well.

Of course, reading that snippet made me like Mark Cuban even more than I already do (anyone else watch him on Shark Tank?). Who wouldn’t want to be able to tip like that and make a person’s day?

It also got me thinking about tipping well while still trying to be a frugal person. How do you reconcile it?

Eating Out Only When You Can Afford the Food + the Tip

Johnny and I don’t eat out very often. We’d much rather cook or order take out and bring it home. But on the rare occasions that we do wine and dine, we like to be able to give at least a 20% tip, which really adds to the price. (Of course, someday we’d like to have the money to pull a Mark Cuban.)

There’s also a little devil inside me who has a really hard time saying goodbye to the money used for tipping each time we eat out (or each time I get my hair done). I mean, it’s not money you have to pay. It’s optional. And no one would know if we jipped the server — except the server. But Johnny and I have been on the other end of the spectrum, and that’s why we’re sticklers for leaving good tips. We know how it feels to get cheated by a customer all in the name of them saving a few bucks. It sucks. Don’t be that person or I will go Liam Neeson on you and hunt you down.

A story and another don’t do: When Johnny and I were servers, an older couple (think at least 80 years old), would come in regularly. If Johnny or I got their table the husband would say, “Now, if you take care of us, we’ll take care of you.” And then he’d wink. So we’d give this little couple the very best service imaginable. Never ending chips and drink refills. Big smiles. After the meal, the husband would head out saying, “Hopefully that will help with your newlywed life.” And every time, it was a whopping $2 tip. Oh how many times he burned us. Luckily it was a cute old man who did this to us, but it required some extreme self-restraint to keep from lecturing him on inflation.

Remembering the Server’s Income Depends on You

In trying to be frugal, we’ve gone out to eat with coupons for half off our meal. And when the bill arrives, we want to do a little dance around the table at all the money we saved. But that server still had to work just as hard for us, whether the meal was half off or not. So although it’s hard to say goodbye to those extra bucks, we still tip as if both meals are full price.

So we reconcile good tipping by a) budgeting for the food AND the tip before we get our check, and b) trying to remember that a person’s livelihood is at stake. I’ve never given a Cuban-esque tip, but I will say that on the few occasions when I was a server and someone left me a $20, it made my night/week. I would love if Johnny and I could start doing that a few times a year.

What about you? How do you reconcile good tipping while still being frugal? Or do you?… any rebels on our blog today? How do you feel about tipping in general?

————————————-

(Original photo by H.L.I.T.)

Previous Post Next Post

You Might Also Like

47 Comments

  • Reply Mrs. Pop @ Planting Our Pennies January 31, 2013 at 7:20 am

    We’re definitely of the theory that tipping is not optional. Even at places like Starbucks and Subway, if we are regulars we might pay with the card most of the time, but then every once in a while we drop a couple of bucks in the tip jar.

    The way I look at it, tips are built into the calculations of a server’s pay, so if I don’t tip it’s not like the restaurant is going to increase their wages.

    From the server perspective, what about tips on gift cards? Say you have a $15 bill and a $20 gift card. Is it kosher to leave the whole gift card and no cash? Would the server get the $5 in cash from the register?

    • Reply Joanna January 31, 2013 at 3:10 pm

      Agreed! I think some people are unaware that server’s *completely* rely on customers for their pay.

      Good question about gift cards! I was never faced with that situation when I was a server, or if I was, it wasn’t enough of an issue that I remember it. I would assume that the server would just get cash from the register.

  • Reply Laurie January 31, 2013 at 8:02 am

    We’re with you, Joanna. If we can’t afford to tip well, (for good service, of course), then we don’t go out. As a former server myself, I know too just how hard they have to work to make a buck. Not to mention all of the crap they have to put up with. It may be an extra $5 for us to tip extra well, but for the server, it may mean they can pay their electric bill. Plus, we don’t ever wanna be the customers that servers cringe at when we walk through the door. We’d rather be the ones they’re clamoring to seat and treat well. Thanks for a great post!

    • Reply Joanna January 31, 2013 at 3:17 pm

      I hear ya, Laurie! I’ve never met a former server who isn’t adamant about tipping well, and for good reason! We had an upstairs section of the restaurant we worked at, and on the nights I had to work that area, good tips were *especially* appreciated. 🙂

  • Reply JMK January 31, 2013 at 8:02 am

    My teenaged son delivered pizzas for the past 18mths, and tipping the delivery person should be manditory in that industry. He is paid less than minimum wage on the assumption that he’ll be getting tips. The tips however range from rounding up to the next dollar to the occasional person who is very generous. I don’t think most people realize that the delivery person’s gas is covered out of their pay/tips. They use their personal car (or their mom’s in our case), make less than minimum wage and the tips some nights barely cover the gas. We live in a semi rural area so the deliveries can be 30 minutes round trip down rough country roads. Can you drive for 30 minutes on $2 in gas? He’s recently given up the job and decided that he’d be financially better off with a regular PT job at full minimum wage and only enough gas needed to get there and back.

    • Reply Joanna January 31, 2013 at 3:21 pm

      My older brother did pizza delivery in between semesters of college, and I remember him having a similar experience to your son. Before that I didn’t know just how much pizza delivery guys relied on tips, too! People definitely need to be better informed on that. He ended up finding a new job, like your son, because the pay just wasn’t worth it anymore!

  • Reply JMK January 31, 2013 at 8:07 am

    One more thing about pizza delivery. When you get a reputation as a lousy tipper, all the drivers make a note of that in their iphones. Picture this: your pizza is ready for delivery, and all the drivers are playing “rock, paper, scissors” to see who loses and has to deliver your order and take a loss.

    • Reply Joanna January 31, 2013 at 3:23 pm

      If only there were a way to let those lousy tippers know the reputation they have!

  • Reply Michelle January 31, 2013 at 8:19 am

    I haaaate bad tippers. If you can’t afford to tip, then get fast food instead!

    • Reply Joanna January 31, 2013 at 3:25 pm

      Agreed. Have you ever been in the situation of someone paying for your meal, and you realize they’re going to leave a less than decent tip? I never know what to do in those situations… secretly slip the server a $5?

      • Reply Kathy May 17, 2013 at 3:56 pm

        Not that many of our friends are bad tippers (we were pretty much all servers at one point or another), but some of our older family friends are pretty tight with their wallets. If I know they are paying for the meal, then I INSIST (like, no holds barred) that I leave the tip as a “thank you” for their generosity. Usually, they’re happy to spend less money, and I’m happy knowing the server isn’t getting jipped.

  • Reply KK @ Student Debt Survivor January 31, 2013 at 9:03 am

    I have an upcoming post about exactly this topic, and how angry it makes me when people don’t tip appropriately. I worked in the service industry throughout high school and college and it’s not easy. Like Michelle said, if you can’t afford or don’t want to tip buy fast food, or better yet, stay at home!

    • Reply Joanna January 31, 2013 at 3:28 pm

      Any of us who have worked in the service industry feel strongly about this topic. Until you’ve been on the wrong end of a bad tip (or been stiffed!), it’s hard to see why we’re so adamant about it!

  • Reply Shellie January 31, 2013 at 9:05 am

    I too pride myself in being a good tipper. Almost always right around 20%. The only thing that really bugs me is that when you have bad service and don’t want to tip well, the server just thinks you are a jerk and stiffing them.
    Short of going to a manager I wish there was some way to let the server know- Hey, you sucked. You were rude. My glass was empty more than it was full. I never got my side of whatever. Do better and your tips will improve.

    • Reply MomofTwoPreciousGirls January 31, 2013 at 11:03 am

      If I have bad service it’s a 10% tip along with a written “tip” on the receipt to let them know why they did not get 20%…

    • Reply Joanna January 31, 2013 at 3:34 pm

      Good idea from MomofTwoPreciousGirls!

      And I know what you mean, Shellie. If it is obvious to me that a server is apathetic or knowingly rude, I’ll give them a bad tip. Sometimes I gave people less than stellar service simply because we were short-staffed, and I was swamped with tables. If that’s not the case, though, servers should only be tipped what they deserve!

  • Reply Brad @ Mr. Write Away January 31, 2013 at 10:44 am

    I couldn’t agree more. Tipping is extremely important… however, so is my refill. If I see my waiter standing around in the corner texting or talking to another waiter while my drink is empty then the tip may reflect that. I like spicy food so a full cup is my lifeline. Do you tip those that aren’t in the black-and-white area like your mail man? Or your mechanic?

    • Reply Joanna January 31, 2013 at 3:40 pm

      I’m one of those annoying customers who drinks like 6 glasses of water at a meal, so I totally know what you mean! And, yes on the mail man at Christmastime. We’ve never actually needed to use a mechanic before. What’s the 411 on mechanic tipping?

  • Reply Karie January 31, 2013 at 10:45 am

    I always go out for dinner with a gift card I received as a gift or some kind of 2 for 1 internet deal so that I feel good about giving a nice tip and that would be on the amount we would pay if the meal was full price. I recently gave 25% for breakfast but I have to say I usually just give 15% for average service. The pizza driver -10% – I am a mile from the pizza place and 95% of the time I pick up but I didn’t know that about their gas, pay, etc.
    If I order say, chicken wings, for take out at a restaurant and pick it up, am I supposed to tip? The bill always comes up with tip____ and I’m always confused about what to give?

    • Reply Joanna February 1, 2013 at 12:31 am

      Personally, Johnny and I don’t tip when we get take out. That’s one of the reasons we pick it up rather than have it delivered — so we don’t have to spend more!

      When the bill has a space for a tip in those situations, I think we’re just wired to feel guilty for leaving it blank, which is absurd!

    • Reply Britt July 17, 2013 at 12:09 pm

      You should definitely tip for take-out! At all of the restaurants I have served/bartended, I was responsible for answering the phone, taking the order, and prepping the to-go orders….boxing them, bagging them, filling drinks, rolling silverware, etc. This was all in addition to the regular customers who actually took the time to come in to the restaurant, and had to wait for my to fill a to-go order. Us servers used to fight about who had to prep to-go orders 🙂

  • Reply Brian January 31, 2013 at 11:27 am

    I am a very good tipper. It probably comes from being around a friend who is an awful tipper. His theory is you can just get a better job, not realizing that serving tables usually is the better job (as compared to Walmart etc). This is the same friend who complained at how expensive the food was in Europe (I dunno, maybe becuase they pay them a living wage and people don’t tip).

    Another example of good tipping… When we were in Germany during Oktoberfest, our friends took us out to a techno bar. My wife would go up and buy drinks and tip 1 Euro a Drink (like an American Bar, usually they just let them keep the change). Wouldn’t you know it, every time she walked up to the bar, the bartender remembered her order and would skip everyone else to server her first!

    Final thought, never underestimate the $20 trick when checking into a hotel. Just place it under your CC and ask if there are any complimentary upgrades available. It works many times (especially in Vegas where they tend to return the $20 if they can’t get you a nicer room). If they don’t have upgrades I still usually tip them a fiver or a ten spot for trying.

    • Reply Joanna February 1, 2013 at 12:39 am

      I love the Oktoberfest story… in the service industry, you will bend over backwards for a good tipper!

      Johnny was actually thinking about doing a post on the $20 trick in the near future! He might shoot you an email to hear about some of your experiences with it. We’ve done it a few times, and it’s totally been worth it.

  • Reply Gary January 31, 2013 at 1:30 pm

    I work as a server 3 nights a week. I have some people leave me less than 5% tip. I never forget a face that leaves me a bad tip. I know for a fact that I am a great server. I take a lot of pride in my work. I agree with everyone. If you cannot afford the 20% do not go out to eat. No one ever considers the tip to the end of the meal. On a few occasions, I have let it be known that I have a full time job and have 3 children. The sympathy tip is usually well worth it. I always make sure I go out of my way to thanks people that leave me nice tips. I wish everyone could work in the service industry then they would understand how to tip.

    • Reply Joanna February 1, 2013 at 12:46 am

      Just hearing you talk about getting bad tips brings back all those angry feelings I would get when that would happen. And you should totally mention being a father of three kids to your tables… I think once people realize you’re a human being making a livelihood they’re more likely not to be cheap. One would hope, anyway!!

      And to have a full-time job and be a server means you are one hard-working dude. Your wife and kids are lucky to have you.

  • Reply Emily @ evolvingPF January 31, 2013 at 1:44 pm

    We tip 20% unless we have particularly bad service (15%) or good service (I have tipped as much as 50%). We tip on the non-discounted price of the bill.

    I think tipping is an area where frugal can be differentiated from cheap. The tip is part of the cost of going out, and if you stiff the server you are being stingy. If you want to be frugal, get take-out.

    • Reply Joanna February 1, 2013 at 12:48 am

      You’ve got it figured out, Emily! I wholeheartedly agree with everything you said!

  • Reply Newlyweds ona Budget January 31, 2013 at 2:52 pm

    my husband and i also rarely go out to eat (about once a month?) but when we do we like to leave a good tip. that being said, we also expect good service. if i have to wait 20 minutes after you’ve taken back my plate before you ask us if we want dessert, and i’ve seen you stop at another table three times in that same time period, don’t expect me to be generous.
    I also think it depends on where you live. In CA, all servers make at least minimum wage. And also, I really think there should be a limit to tip jars. I honestly feel like I’m being nickeled and dimed everywhere I go with all the tip jars now for the basic stuff. They even have tip lines for when you get your takeout food! Hellooo, that’s why I’m getting takeout!
    The line has to be drawn somewhere. They’re called minimum wage jobs for a reason, and you’re supposed to work your way up from there. I worked at a move theatre and we always got so much crap for the prices as if I actually put the prices in place. Everyone pays their dues…

    • Reply Joanna February 1, 2013 at 12:51 am

      I can attest that working at a restaurant as a server is very hard work, so they totally deserve every tip they get (if they’re trying to give good service, as you say). But the tip jars and tip lines for regular ol’ take-out food or fast food is *definitely* pushing it. Kind of ridiculous.

  • Reply Joanna January 31, 2013 at 3:14 pm

    It’s so crazy to me that some people actually believe that. At the restaurant Johnny and I worked at, our pay was 100% from tips… nothing from the restaurant. AND we had to take at least two shifts a week as a host or cashier, where we would make $5.30/hour (minimum wage at the time)!

  • Reply Sara January 31, 2013 at 3:58 pm

    I was always under the impression that a gift card couldn’t be used for a tip. I always make sure I have extra cash to leave my tip with when using a GC.

    • Reply Joanna February 1, 2013 at 12:52 am

      I’m sure you’re right. I haven’t been in that situation recently, but that’s good to know for future reference!

  • Reply Chris January 31, 2013 at 5:01 pm

    I usually leave 15% – 20% unless the service was bad. Sometimes though, I can’t justify leaving a 15% tip for basically self-service.

    • Reply Joanna February 1, 2013 at 12:57 am

      Yeah, kind of defeats the purpose of going to a restaurant if no one is actually providing you with service. There’s a restaurant Johnny and I frequented in NYC (Hill Country BBQ) where the food was cafeteria style, so all the server did was get your drinks and refill them. The food itself was pretty pricey, so it was hard giving the server 20% of the bill for food you got yourself!

  • Reply Grayson @ Debt Roundup January 31, 2013 at 10:19 pm

    I always try to tip well when we go out to eat. We don’t do it often, but these people need to make a living as well. If you don’t do well, then your tip reflects it. I reward the wait staff for how well they do. I always give 20% if they do well.

    • Reply Joanna February 1, 2013 at 12:59 am

      That 20% is much appreciated, for sure. Maybe Johnny and I just worked in a particularly cheap location, but the average from most people was only about 10%… so we were beyond thrilled for the 20% tippers.

  • Reply Michelle February 1, 2013 at 10:45 pm

    I always tip at 20%. I have worked for tips and quite frankly if you can’t afford to tip (well) on good service why in the hell did you go out? I have a friend that I stopped going to dinners with because she was so cheap and under-tipped it was embarrassing and I always ended up covering her part of the tip. Making my part of the bill much more expensive. Also, I pay in cash when I go out to dinner. Makes things easier. It’s a cultural norm in the U.S. to tip-so do it. But, if the service is bad I tip at 10% and speak to the person’s manager. Luckily, I usually get kick ass service when I go out so very rarely would I tip at 10% (maybe once every 2-3 years)

    • Reply Johnny February 2, 2013 at 11:50 pm

      Amen, Michelle. Nothing is worse than finding out a friend (or date) is a lame tipper. It’s hard to prevent your brain from letting it reflect on them personally, which is a shame. It might just be the way they were raised or who knows. But it definitely helps having worked for tips before.

  • Reply I don’t care about the Super Bowl | Making Sense of Cents February 2, 2013 at 8:00 am

    […] Tipping and Being Frugal: Can They Coexist? Our Freaking Budget […]

  • Reply Brick By Brick Investing | Marvin February 2, 2013 at 7:24 pm

    My mom use to be a server before she joined the military and she told me how much she depended on her tips. When I was younger I use to always tip 15% but ever since we’ve been more fortunate than others I tip 20-25% if the service is good.

    • Reply Joanna February 2, 2013 at 11:45 pm

      That’s great Marvin! Being a server is hard work, so I know those servers really appreciate your generosity!

  • Reply Weekly Cowgirl Rodeo Round-up - L Bee and the Moneytree February 9, 2013 at 8:07 am

    […] Frugal or not, you gotta tip your servers! Joanna at Our Freaking Budget tells us about her and Johnny’s serving days and how it affects their tipping behavior today. […]

  • Reply Sally G May 9, 2013 at 1:12 pm

    I lived in New Zealand for two years and there tipping is not expected. It was so refreshing to have the price of the actual meal upfront. Though I’m a great tipper, (mostly for fun) I never did like the expectation that patrons are responsible for the server’s financial well-being.

    Why not pay the servers better upfront and raise the prices of the meals? It seems a lot more fair all around. Servers would know what they are getting into financially up front. Patrons wouldn’t be made to feel like the weight of someone’s success or failure was their shoulders regardless of how bad the service was.

    I really appreciate your blog. You are taking your own budget and financial future very seriously. You make smart decisions about where you work, what you do, carefully weighing the cost (financial or otherwise) of those decisions. You do take responsibility for your own success! That’s why it’s so surprising to see the general direction of your perspective on the topic of tipping.

    I hope this very late to the party comment is received as intended… as a respectful variation of opinion regarding the institution of tipping in US culture.

    • Reply Johnny May 9, 2013 at 4:19 pm

      We love varying opinion here, so this is perfect. And I actually think the burden of servers’ salary SHOULD be on the employers. It’s never fun showing up to work not knowing what to expect to get out of a night or a week. It makes budgeting really hard.

      Thanks for the comment, Sally!

  • Reply Oriole1 August 9, 2013 at 4:08 am

    People should look at both sides. The reason servers must rely on “tips” is because of greedy/cheap owners. Anyone can succeed when you don’t have to pay their workers. Why am I obliged to finance employee pay when I am being charged an inflated price for something? Tell me, when was the last time that you tipped @ McD’s? How about the guy who changed your oil? The list goes on and on. I don’t stiff waitresses even though I shouldn’t be obligated but, I’m sick of people like bartenders and casino dealers who think it’s an entitlement program. I didn’t go there to line your pockets, IT is your employer’s obligation. Also, people who are in those jobs make enough on “pass-around” tips. i.e. They tip bigger because that is their living too so they do it to set an example. I’ve got news for you, I’m NOT in that circle. I don’t get extra pay to pass around. Most of you servers, dealers, and especially bartenders wouldn’t last an 8 hr. shift in a steel mill or most other heavy industry so count your blessings you don’t have to bare the environment of factories. Typical bartenders don’t claim their tips but expect to work 30(I work 55-60) hrs./wk. and make $1500 and not pay taxes on 90% of it. That amounts to 0ver 70,000/yr. which is actually a 6 digit taxable income. Many lawyers don’t make that and the last time I looked, a HS drop-out could tend bar, w/o 6 yrs. of college which some can’t even spell. If you just want to cry to somebody, don’t cry to me!

    • Reply Johnny August 28, 2013 at 12:51 am

      Very interesting perspective. And I agree with you on quite a few points. I think it’s a lousy system that the employer can get away with paying someone less than $3 (!!!) and put it on the back of their own consumers. Now obviously it’s less about individual owners and more about the culture and system, but employers are still partially responsible.

      As far as the taxes, if they’re honest, they have to account for their tips every night and it’s counted at the end of the year as taxable income. Obviously it’s easy to claim less than what was earned, but not claiming $70k or anywhere close to that would definitely throw up red flags to the IRS. I don’t think it’s nearly that high. And while serving might not be as hard as say a factory job, we could say that about a lot of professions. But at the end of the day, it’s a job and for the most part, they work hard to earn their keep.

  • Reply Oriole 1 August 28, 2013 at 2:21 am

    I also feel %-based tipping is unfair. When you go to an eatery with $12-15 entrees, why does the server that works fine dining w/$22-35 meals deserve more? It’s unfair. And when did 15% turn into 20%? Inflation takes care of percentages by itself. Everything seems to be dictated by those who prosper most from it. Why is the consumer left holding the bag because of someone else’s greed. Tip what you think is fair and throw the %’s away. We’ll all prosper from it. I don’t begrudge servers, it’s bartenders and casino dealers that irate me. They try to embarrass people and I’ve seen rip-offs by crafty ones. Seen dealers talk behind people’s backs in major casinos. Very unprofessional. People don’t come to casinos so a dealer can make a living or to bars to make some bartender’s Porsche payment. Wake up you ignorant imbeciles. Tell your boss he’s cheap. No, you don’t have the guts to! They’re the criminals that dictate these tenets so they can make their BMW pymts. If you want to preach the philosophy that the diff. they are too cheap to pay you will be made up in tips, YOU tip them then. I’m patronizing your establishments. W/o me, you have no business and your employees have no job. Wake up and smell the coffee before everyone puts you where you belong. If you want entitlements, go to the gov.and see what they give you, you mental midgets.

  • Leave a Reply